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Loan Termination Agreement Template for Nigeria

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Key Requirements PROMPT example:

Loan Termination Agreement

"I need a Loan Termination Agreement for an early repayment scenario between our bank and a manufacturing company, where the borrower has offered to settle the remaining balance of a secured corporate loan by March 2025, including the release of equipment collateral."

Document background
The Loan Termination Agreement is a crucial document used when parties wish to formally end their lending relationship under Nigerian law. It is particularly relevant when a loan has been fully repaid ahead of schedule, when parties agree to settle a loan for a different amount than originally agreed, or when restructuring financial arrangements. This document must comply with the Banks and Other Financial Institutions Act (BOFIA) 2020 and other relevant Nigerian financial regulations. The agreement typically includes details of the original loan, final settlement terms, releases of any securities, and mutual discharges. It serves as definitive evidence that the loan obligations have been satisfied and provides legal protection for both lender and borrower against future claims.
Suggested Sections

1. Parties: Identification of the lender and borrower, including their full legal names, registration numbers (if applicable), and registered addresses

2. Background: Brief recital of the original loan agreement details, including date, amount, and purpose, and the parties' desire to terminate the agreement

3. Definitions: Definitions of key terms used throughout the agreement, including 'Effective Date', 'Original Loan Agreement', 'Outstanding Amount', and 'Settlement Sum'

4. Termination: Clear statement of the termination of the loan agreement and its effective date

5. Settlement Terms: Details of any final payment or settlement amount, payment method, and timeline

6. Mutual Release: Provisions for mutual release of claims and obligations related to the original loan agreement

7. Representations and Warranties: Statements confirming parties' authority to enter into the termination agreement and accuracy of information provided

8. Confidentiality: Obligations regarding confidentiality of the termination agreement and original loan terms

9. Governing Law and Jurisdiction: Specification of Nigerian law as governing law and jurisdiction for dispute resolution

10. Entire Agreement: Confirmation that this document represents the entire agreement regarding the loan termination

11. Execution: Signature blocks and execution requirements

Optional Sections

1. Outstanding Interest Calculation: Detailed calculation of any outstanding interest, to be included if there are complex interest calculations or disputes

2. Security Release: Provisions for releasing any security or collateral, required only if the original loan was secured

3. Tax Implications: Statements regarding tax responsibilities, included if there are significant tax consequences to the termination

4. Third Party Rights: Provisions regarding rights of guarantors or other third parties, needed if third parties were involved in the original loan

5. Survival Clauses: Specification of which provisions survive termination, included for complex loans with ongoing obligations

6. Dispute Resolution: Detailed alternative dispute resolution procedures, recommended for high-value loans or complex relationships

Suggested Schedules

1. Schedule 1 - Original Loan Agreement: Copy or details of the original loan agreement being terminated

2. Schedule 2 - Settlement Calculation: Detailed breakdown of the final settlement amount, including principal, interest, and any fees

3. Schedule 3 - Payment Schedule: If settlement is to be paid in installments, detailed payment schedule with dates and amounts

4. Appendix A - Security Release Documents: Forms and documents required for releasing any security or collateral

5. Appendix B - Confirmation of Payment: Template or actual confirmation of final payment or settlement

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions


































Clauses




























Relevant Industries

Banking

Financial Services

Corporate Lending

Microfinance

Real Estate

Manufacturing

Agriculture

Oil and Gas

Telecommunications

Construction

Small and Medium Enterprises (SMEs)

Relevant Teams

Legal

Finance

Compliance

Credit Risk

Treasury

Corporate Secretariat

Debt Recovery

Loan Operations

Documentation

Relevant Roles

Chief Financial Officer

Finance Manager

Legal Counsel

Compliance Officer

Credit Risk Manager

Loan Officer

Corporate Secretary

Treasury Manager

Financial Controller

Banking Relationship Manager

Debt Recovery Officer

Contract Manager

Legal Director

Finance Director

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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